The 500 Euro note is under attack as well http://www.bloomberg.com/news/articles/2016-02-12/500-euro-note-draws-scrutiny-of-european-finance-ministers. However Switzerland is keeping the 1000 Franc note. http://www.reuters.com/article/swiss-banknotes-idUSL8N15V25M
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By that same reasoning we should outlaw corporations.
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Hmm⌠eliminating a note of a particular denomination doesnât auto-magically overcome the creation of confusion during layering (moving the money around to make it appear legitimate; which⌠ahem⌠is the critical step in money laundering). Making the pile of ill gotten gains physically /larger/ by reducing the denomination of the notes doesnât really do anything (other than make for a larger pile of notes). People have actually managed to launder over a million dollars in the form of change,
Also, Summers isnât making an actual argument about money laundering so much as making a destination argument (with a little fear mongering tossed in).
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âPeople have actually managed to launder over a million dollars in the form of changeâ
The Mafia did that for decades with casinos and illegal slot machines.
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Well, I got your joke (and Iâm a woman).
Itâs amazing how much crap a president of a university could get himself into.
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The elimination of larger denominations also proportionately drops the value of counterfeiting. Thatâs why we stopped printing the really ridiculous denominations like $500 after WWII, after the full scope of Operation Bernhard became known. The goal there was to prevent future enemies from cheaply destabilizing our currency, but reducing the profitability of counterfeiting as a criminal enterprise is notable as well.
(Not that this angle would make the suggestion it any more necessary: the most-counterfeited bill is $20, and most counterfeits are small scale, painfully bad, and are only accepted by the truly naĂŻve.)
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Pennies?
Or âŚ
I donât think thereâs nearly that much introspection going on here. I think heâs simply forgetting that there are people out there without bank accounts or credit cards.
I mean, pretty much everyone else is. For example, you canât rent anything â videos, a car, a hotel room â without a card anymore, because as a matter of policy no one wants to accept any risk. That wasnât a concerted movement to make poor peopleâs lives harder, it was just the sort of lazy policy decision that ubiquitous credit allows. Why would a business go out of itâs way to implement special measures on to cover a negligible number of transactions that all also demand they accept slightly more risk? Itâs a no-brainer from a business standpoint.
The problem is not that there are people who want to screw poor people, the problem is that it is so cheap to ignore poor people altogether.
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The motive hear seems to be regarding international money laundering, where large bricks of cash are physically moved across a border and then laundered.
As you say, the proposal doesnât do anything if the launderer is someplace you can easily and untraceably move the money to. If youâre picking up bills in the U.S. and laundering them through, say, a small chain of grocery stores in the same state, then the proposal doesnât affect that at all.
But if you have to get 500 lbs of bills across the Rio Grande, it means twice as many trips, and twice as many opportunities for things to be broken up.
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No pardon need, that is a well worded and precise description.
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Wow, what brilliant, incisive logic this guy uses. Europeans applied a nasty nickname to something - that PROVES itâs evil and should be done away with. How come he doesnât apply the same âlogicâ to beltway bandits? Could it be because he is one?
WHY does our government keep employing such senseless %!@heads?
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Yeah this wouldnât effect money LAUNDERING so much because the large denominations are so associated with illegal use. Large denominations make it easier for criminals to use cash as a medium of exchange so that they donât HAVE to launder the money.
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Hey, even a broken clock is right 24 times a day.
If you donât take into account the hour hand.
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I will be happy to assist Mr. Summers in his quest. He can simply forward all his unwanted $100 bills to me and I will take care of the problem for him.
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$100s are good for low to medium value transactions, but when you really need to carry $100 million in a briefcase, you want a Picasso.
Support the war on drugs - Ban Art!
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Shouldnât we have a treasury secretary that understands money? With inflation being what it is, dropping the $100 is incredibly short sighted. $100 isnât what it used to beâŚ
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In addition to everything else mentioned, even the reasoning were sound, a 500 euro note is still worth more than 5x the $100 note (although maye not for longâŚ). So an argument that âpeople call the EUR500 the bin ladenâ, while fundamentally unsound, is also pretty much irrelevant to the US $100.
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âThe Mafia did that for decades with casinos and illegal slot machines.â
Youâre referencing âskimmingâ which is diverting money before it gets counted in the counting room. Once one takes the âskimmedâ money and attempts to place it (and then layer it) thatâs money laundering.
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âBut if you have to get 500 lbs of bills across the Rio Grande, it means twice as many trips, and twice as many opportunities for things to be broken up.â
Hmm⌠youâre overlooking that if one can /physically/ move the currency to the destination then thereâs no reason to launder it in-between. Moving /physical/ money around isnât laundering. Laundering involves placing the money (injecting it into the System), layering it (so it looks legitimate) and then (once it looks like âcleanâ money) getting it to its destination.
Youâre /fundamentally/ misunderstanding the concept of money laundering: taking dirty money (criminal proceeds) and making it /look/ âcleanâ (unable to be traced back to its origination as a criminal proceed).
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I donât think the push for all digital money is so that the government can track everything so much as a cashless, all digital economy can enforce a negative interest rate regime without fear of citizens hiding out in cash. Itâs much better for the status quo elites to spread the losses via negative interest rates than reform/alter the FIRE economy. Larry Summers is a perfect example of a status quo elite, by the way.
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